What you need to do to become a financial advisor

Becoming a financial advisor requires you to pass a licensing exam, complete a background check, and work for a registered firm. The most common path is to pass the Series 7 exam (for general securities) or the Series 65 exam (if you want to manage client money directly), then register with the Financial Industry Regulatory Authority (FINRA) or your state's securities regulator. You cannot work as an advisor without this registration, and you cannot register without passing an exam first.

The timeline from starting study to your first client typically takes three to six months, depending on how quickly you find a sponsoring firm and how much time you spend preparing for the exam. Most people study for four to eight weeks before sitting for the test. You will need a job offer from a brokerage, investment firm, or bank before you can register — the firm sponsors your license.

Key Takeaways

  • You must pass either the Series 7 or Series 65 exam and register with FINRA or your state regulator before you can legally advise clients on investments.
  • A sponsoring firm (brokerage, bank, or investment company) must employ you and submit your registration paperwork to FINRA or your state.
  • A background check is required as part of registration, and any criminal history or financial violations may disqualify you.
  • The Series 7 exam costs around $300 and takes four to eight weeks of study; the Series 65 is similar in cost and study time.
  • After passing your exam and registering, you will need to complete continuing education credits each year to keep your license active.

Which exam you need: Series 7 versus Series 65

The Series 7 is the General Securities Representative Exam. It covers stocks, bonds, mutual funds, options, and other securities. You take this exam if you want to work at a brokerage or investment bank and sell securities to clients. The exam has 250 questions and you have five hours and 45 minutes to complete it. You need a score of at least 72 percent to pass.

The Series 65 is the Uniform Investment Adviser Law Exam. It covers investment information, portfolio management, and the laws that govern advisors who manage client money. You take this exam if you want to work as an investment advisor representative and have direct control over client accounts. The exam has 130 questions and you have three hours to complete it. You need a score of at least 73 percent to pass.

Most financial advisors start with the Series 7 because more job openings exist for securities representatives at banks and brokerages. If you later want to move into independent advisory work or manage client portfolios directly, you can add the Series 65. Some advisors hold both licenses.

How to find a sponsoring firm before you take the exam

You cannot register for the Series 7 or Series 65 without a firm willing to sponsor you. This means you need a job offer from a brokerage, bank, investment firm, or registered investment advisor before you sit for the exam. Most people search for entry-level positions like "financial advisor trainee," "investment representative," or "wealth management associate" at firms in their area.

Large firms like Fidelity, Charles Schwab, Merrill Lynch, and Vanguard hire entry-level advisors regularly and often pay for your exam fees and study materials. Smaller independent brokerages and regional banks also hire advisors. When you interview, ask whether the firm will cover exam costs and whether they give you paid study time before the test.

Once you have a job offer, the firm will give you the Form U4 (Uniform process for Securities Industry Registration or Transfer). You complete this form, and the firm submits it to FINRA along with your exam registration. You cannot sit for the exam until FINRA receives and processes your U4, which usually takes one to two weeks.

Preparing for and taking the exam

Study materials for the Series 7 and Series 65 are available from test prep companies like Kaplan, STC (Securities Training Corporation), and Wiley. Most people use online courses that combine video lessons, practice questions, and full-length practice exams. Costs range from $200 to $500 depending on the provider. Your sponsoring firm may offer free or discounted access to study materials.

The exam is administered by Prometric, a testing company. You schedule your test date through Prometric's website after your U4 is approved. Test centers are located in most cities, and you can usually find an appointment within one to two weeks. Bring a government-issued photo ID and arrive 15 minutes early.

If you do not pass on your first attempt, you can retake the exam. There is no limit on the number of attempts, but you must wait 30 days between attempts. Most people pass on the first or second try if they study for four to eight weeks.

The background check and registration process

After you pass your exam, FINRA runs a background check that includes a criminal history search, a credit check, and a review of any financial violations or civil judgments against you. The check typically takes two to four weeks. Certain criminal convictions (especially fraud or theft) and unpaid judgments may disqualify you from registration.

Once your background check clears, FINRA issues you a CRD number (Central Registration Depository number), which is your permanent identifier in the securities industry. Your firm then registers you in their system, and you are officially licensed to conduct business. Your firm will give you a copy of your registration confirmation.

You must renew your registration every two years. Renewal requires you to complete continuing education credits — typically 20 hours per year, with at least four hours in regulatory and compliance topics. Your firm usually handles the logistics of tracking and reporting these credits.

What happens after you are licensed

Once registered, you can begin advising clients and selling securities. Your first weeks will likely involve shadowing experienced advisors, learning your firm's systems, and building a client list. Many firms provide training on compliance rules, client communication, and sales techniques.

Your firm is responsible for supervising your work and ensuring you follow securities laws. A compliance officer at your firm will review your client communications, trades, and recommendations. Violations of securities laws or firm policies can result in fines, suspension, or termination of your license.

Some advisors stay at their sponsoring firm for their entire career. Others move to different firms, start their own independent practice, or transition into related roles like portfolio management or financial planning. Each move requires updating your registration with FINRA.

Other credentials you may pursue later

The Series 7 and Series 65 are the minimum licenses you need to work as an advisor. Many advisors later earn additional credentials like the Certified Financial Planner (CFP) designation, which requires passing a three-part exam and meeting education and experience requirements. The CFP is not required to work as an advisor, but it signals advanced knowledge and can help you attract clients.

Other common credentials include the Chartered Financial Analyst (CFA), the Chartered Special Needs Consultant (ChSNC), and the Certified Investment Management Analyst (CIMA). These are optional and typically pursued after you have worked in the industry for a few years.

Frequently Asked Questions

Do I need a college degree to become a financial advisor?

No college degree is required to pass the Series 7 or Series 65 exam or to register as an advisor. However, most firms prefer to hire advisors with at least a high school diploma or GED, and many prefer a bachelor's degree in any field. A degree in finance, business, or economics can help you understand the material faster, but it is not mandatory.

How much does it cost to become a financial advisor?

The exam fee is around $300, and study materials cost $200 to $500. Your sponsoring firm typically covers these costs as part of hiring you. The background check and registration fees are also usually paid by the firm. Out of pocket, you may spend nothing if your firm covers everything, or a few hundred dollars if you choose premium study materials on your own.

Can I take the Series 7 or Series 65 without a job offer?

No. You must have a sponsoring firm submit your U4 form to FINRA before you can register for either exam. You cannot sit for the test without this registration. This is why finding a job offer comes before exam preparation.

What disqualifies you from becoming a financial advisor?

Certain criminal convictions (especially fraud, theft, or securities violations), unpaid judgments, and disciplinary actions from other industries can disqualify you. Each case is reviewed individually by FINRA. If you have concerns about your background, ask your sponsoring firm or FINRA directly before investing time in exam preparation.

How long does it take from job offer to your first client?

Typically three to six months. This includes one to two weeks for FINRA to process your U4, four to eight weeks of exam study, one to two weeks for the exam appointment, two to four weeks for the background check, and one to two weeks for final registration. Some firms allow you to start training while waiting for your license to clear.